THE Federal Government recorded a N3.09 trillion deficit in its 2022 budget implementation between January and April as subsidy on fuel gulped N1.94 trillion, exceeding revenue for the period by 19 per cent.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this at the Public Consultative Forum on the draft federal government 2023 – 2025 Medium Term Fiscal Framework & Fiscal Strategy, in Abuja, yesterday.
According to her, the deficit underscored the fiscal challenges confronting the federal government.
Her words, “As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49% of the pro rata target of N3.32 trillion,” adding, “The actual spending as of April 31st was N4.72 trillion.”
Out of the N4. 72 trillion, Ahmed explained that N1.94 trillion was spent on debt service; N1.26 trillion on Personnel cost, including Pensions; and N773.63 billion on capital expenditure.
The Minister also announced that the Nigerian National Petroleum Company Ltd which had funded the petrol subsidy until last month would henceforth leave that responsibility to the federation.
This she said would even create a greater strain on the fiscal position of the federal government, describing petrol subsidy as unsustainable.
On revenue from the new NNPC, the minister explained, “NNPC will be paying loyalties, dividends and taxes. We will work out an arrangement with NNPC on how this will be paid, and it is possible to work out an arrangement where the payment could be monthly or quarterly.”
Mrs. Ahmed lamented the low oil revenue which for the past eight months had been taken up by subsidy payments by the NNPC, with zero remittance to the Federation Account.
According to her, “the gross oil and gas federation revenue for full year 2022 was projected at N9.37 trillion; as at April 30, 2022, N1.23 trillion was realized out of the pro-rata projection of N3.12 trillion, representing a mere 39% performance.”
She added: “Despite higher oil prices, oil revenue under-performed due to significant oil production shortfalls for two main reasons: oil production shut-ins resulting from pipeline vandalism and crude oil theft; and high petrol subsidy cost due to higher landing costs of imported products.
“Actual average crude oil price is higher than the budget benchmark price of $73 per barrel. However, higher oil price is offset by lower oil output, which as of April 2022 stood at an average of 1.32 mbpd.
“NNPC attributes the fall in oil production to the high incidence of crude oil theft and pipeline vandalism.”